The following transactions took place in December 2021 at MegaMart. MegaMart follows IFRS and uses the...

 

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The following transactions took place in December 2021 at MegaMart. MegaMart follows IFRS and uses the contract-based approach to revenue recognition and a perpetual inventory system. Dec 10 Dec 15 Dec 18 Required: Sold goods to Mastermind Toys for $15,000 cash. These goods cost $8,000 to purchase. MegaMart estimates returns at 1% of sales. Company X has agreed to purchase goods worth $4,000 for a price of $7,500. Terms are n/30 and FOB Shipping. The goods will be shipped on January 2nd. MegaMart estimates returns at 1% of sales. Sold 1000 units @ $18 to Tiny Town Toys, n/30. The goods cost MegaMart $10. There is no uncertainty about Tiny Town Toys ability to pay. MegaMart stands behind these goods and is willing to repair any defective units. Typically, 2% of their units sold are defective. The cost of repairing these units is $5. MegaMart sold one-year extended warranties to Tiny Town Toys on these 1000 units for $2/each. 1. Record each of the above transactions. If revenue cannot be recognized for any transaction, explain why not using Asset- Liability Approach criteria. The following transactions took place in December 2021 at MegaMart. MegaMart follows IFRS and uses the contract-based approach to revenue recognition and a perpetual inventory system. Dec 10 Dec 15 Dec 18 Required: Sold goods to Mastermind Toys for $15,000 cash. These goods cost $8,000 to purchase. MegaMart estimates returns at 1% of sales. Company X has agreed to purchase goods worth $4,000 for a price of $7,500. Terms are n/30 and FOB Shipping. The goods will be shipped on January 2nd. MegaMart estimates returns at 1% of sales. Sold 1000 units @ $18 to Tiny Town Toys, n/30. The goods cost MegaMart $10. There is no uncertainty about Tiny Town Toys ability to pay. MegaMart stands behind these goods and is willing to repair any defective units. Typically, 2% of their units sold are defective. The cost of repairing these units is $5. MegaMart sold one-year extended warranties to Tiny Town Toys on these 1000 units for $2/each. 1. Record each of the above transactions. If revenue cannot be recognized for any transaction, explain why not using Asset- Liability Approach criteria.

Answer rating: 100% (QA)

Answer MegaMart Transaction Recordings IFRS 1 December 10th Transaction Sold goods to Mastermind Toys for 15000 cash Journal Entry Debit Cash 15000 Cr... View the full answer